Compare Auto Insurance Companies

Choosing to buy a car means taking into account not only the expense of the car, but the expense of car insurance. Car insurance is required by state law in most cases, because the cost of uninsured damages can be sky-high. Driving without insurance can lead to an arrest, a fine, or devastating costs from an accident.

It is essential to compare car insurance rates and coverage among many different insurers, to achieve a low premium and the peace of mind that comes with knowing injuries and damages from accidents will be covered. Rates and coverage vary by geographical area.

When evaluating your insurance options, you need to consider how much insurance you need, as well as what it should cover. You should be honest about any situations in which you may need to file a claim – for instance, if you regularly speed, you should be honest about it. Your budget for a monthly premium is a second factor. Finally, you should choose a reputable company that you want to patronize.

Comparing rates in your area is easy – just enter your five-digit zip code in the box on this page. Before you do, though, here are a few things you should know about insurance and why your premium costs what it does.

Types of Coverage

Insurance plans vary according to the driver’s needs. An agent will help you put together a package that covers your individual wants and needs. The categories of coverage, which can be mixed and matched in different plan types, include:

Collision: Covers damage to the vehicle arising from a collision with a stationary object or another vehicle.

Medical: Pays bills in the event of necessary medical care arising from the accident. This coverage applies only to the insured driver and immediate family.

Liability: Consists of two categories –

    – Bodily Injury: Insures medical expenses for non-related passengers and members of any other cars in the event of a collision.

    – Property: Covers private or public property damaged by a collision. The property component of liability does not apply to property belonging to the insured driver.

Uninsured/Underinsured: Covers damage or other expenses in the case of a collision with an at-fault driver who is uninsured, or carries too little insurance to cover the damage.

Comprehensive: Insures in the case of theft or damage from an act of nature, such as fire. Car renters obtain comprehensive insurance for the rental period.

Factors Affecting Insurance Rates

Many characteristics of the car and yourself affect your premiums. Some of these considerations include:

1. Type of Car

For instance, four-door sedans are cheaper to insure because they are usually purchased by people with families, who are generally more cautious drivers. Some SUVs may get lower premiums because they are safer cars by their very design, and can carry lower repair costs and medical bills in the event of a collision.

Flasher cars, such as sports cars, are more expensive to insure because drivers tend to take more risks. They are also stolen more frequently than other cars, and their replacement costs tend to be higher. Pickups can be more expensive to insure as well, because by nature, they are used to haul so much property.

Hybrids can go either way on the insurance cost scale. For now, a couple of insurers offer discount incentives for buying a hybrid. This is likely due to a perception that hybrid buyers are responsible and lower risk. However, companies do not have enough data on how hybrids respond to crashes. Some believe in the long run, they are more expensive to repair due to battery risks. Before purchasing a hybrid, be sure to check out insurance rates.

2. Make and Model

Prior to purchasing a car, check several different insurers to see premiums on the specific make and model you are considering. Different cars have different potential issues, and insurers adjust their premiums accordingly. Premiums on new cars begin as a response to initial reviews and safety ratings, and may be subject to adjusted rates once insurers receive more data on accidents involving those cars.

3. Repair Costs for the Model

The more a model costs to repair, the more expensive insurance will run. Buying a foreign car can cause automatically higher insurance rates, because parts and repairs are generally more expensive in America.

4. Demographic Data

Insurance companies collect data on which demographics are most at-risk for accidents, and the degrees and causes of these accidents. For this reason, gender and age may affect your premium.

5. Additional Features

You can purchase your car with certain additional features that may lower insurance premiums. For instance, a built-in anti-theft device may lower your rate, or lower your incentive for obtaining comprehensive coverage. Safety features such as air bags and automatic seatbelts lower the risk of severe injury, thus lowering your premium.

Obtaining the Lowest Rate

The first quote you see may not always be the final price. Some ways that you can lower your premium include:

• Maintaining a clean driving record. People without speeding tickets, previous accidents, and other moving violations represent a low risk for the insurer. Any moving violation can cause the insurance company to raise your rate.

• Keeping good credit. If you have a good credit report/score, the insurance company will reward you because they see you as reliable.

• Obtaining multiple policies through one insurer. Companies who insure your home, life, and car will offer lower rates for each policy.

• Limiting certain drivers to one car. If you have teenagers or new drivers insured on your policy, you can lower your rate by limiting them to one main car. Teens are some of the greatest insurance risks, and by minimizing their car use (perhaps to the least expensive insurable car), you lower the risk to the company.

• Insuring more than one car on a policy. If you have more than one car to insure, you may insure them all on one policy. By providing information on the specific use of each vehicle, you can lower the rate per car. For example, a car that is less frequently used will rate a lower premium.

• Obtaining only liability coverage. This means that in the case of a collision without medical costs or damage to another car, your car will not be repaired. This is recommended when a car is older or in poor condition, and it would be more expensive to repair the car than to replace it.

• Allowing a higher deductible. If your emergency funds would allow higher out-of-pocket costs in the case of a collision, consider raising your deductible. This way, even in the case of an accident, the insurance company is liable for a lower payout and thus takes a lower risk.

No-Fault Insurance

Some states, in response to the rising cost of settlements and insurance, have adopted no-fault insurance laws. If you live in one of these states, these laws may affect your premium, as they regulate the cost of settlements. Some basic tenets of no-fault insurance are:

1. Each company with a driver involved in a collision is required to pay claims on true damage. This means that rather than waiting for decisions on fault, insured drivers receive their payments quickly.

2. Drivers must sustain a minimum loss before filing a lawsuit. This protects drivers from being sued over minimal damage. It also lowers court costs to the involved parties, as well as the burden on state courts.

3. Because lawsuits are minimized, the liability portion of an insurance policy covers pain and suffering. A driver cannot sue for what is already covered.

Applying for Insurance

It is extremely important to be honest when applying for insurance. You need to disclose information which makes you a higher risk, because insurers can go to court to fight the validity of the claim. If the court finds that the company had a genuine reason not to believe you were a risk, you may be denied a claim.

Factors you need to disclose include past speeding and moving violations, daily commutes through busy cities, and every driver that will regularly use the car. If you provide false information, deliberately or not, an insurer may cancel your policy at any time. Again, they may also legitimately not provide a claim after an accident.

Be honest with yourself when comparing rates. If you are a higher-risk driver, complete your search accordingly.

Selecting Your Insurer

After you obtain rates on your new insurance, you should narrow your choices down to a few quotes that provide the best coverage and premium for your needs. Do some research on the companies providing the quotes. Not all insurers are equal, and sometimes, the quality of the company may be worth a little extra premium. The following ratings can help you determine which companies to put on your short list of potential insurers:

Customer Service Department

The National Association of Insurance Commissioners keeps records of complaints filed for each insurer within each state. They use this data to calculate a complaint ratio, which you can compare among insurers. Then, you will have a better idea of how companies handle claims in comparison to each other.

Official Rating

The A.M. Best Company has published grades for each insurer since 1905. Grades range from an A+ down to a C. You can obtain the most recent report at the company’s website, ambest.com, or at a public library. Beyond the grades, you can read the descriptions of each company for indications as to their quality. A.M. Best will use qualifiers such as “most” and “very” to distinguish insurers from each other.

Final Advice: Shop Around

Once you settle on an insurer, don’t be afraid to go elsewhere later. The car insurance business is a competitive field, and different companies are always trying to win business from the others. When it comes time to renew your insurance and pay a new premium, make sure that your company is still giving you the best rate.

By entering your five-digit zip code, you gain access to insurance quotes and reviews of companies. A side-by-side comparison can help you see each of your considerations, such as benefits and cost, and decide which company gives the most bang for the buck. Don’t settle on the first insurer you see, and don’t feel tied to the first insurer you choose. Compare rates and coverage to find the best plan for your individual needs. Enter your zip code now!